Bitcoin Forum

Now that I've caught your attention, I believe that there is one fundamental flaw with the bitcoin model, failure to be recognized by any authority.

If it is failed to be recognized, then the value cannot be guaranteed. Modern day currencies are recognized as payment by a authorities within the country of issuance, e.g the government recognizes them as payment for taxes,etc, and once upon a time the value was guaranteed by gold.

It has been brushed upon in another thread¹.

Essentially the problem is this, firstly Bitcoin shows

                 It is possible to have a currency without a central banking authority.
                 That implementation is not difficult.

So why are these issues? Whats stopping a different another crypto-currency with exactly the same attributes as bitcoin? And by extension I believe that there will be competing crypto-currencies forming a "crypto-currencies market". This takes away one essential property that makes bitcoin by itself appealing.

                 The amount of crypto-currency in circulation is no longer pre-determined, rather it is infinite.

How is this achieved? If an entity does not want to recognize the value of a particular crypto-currency then they will simply start their own. Hence crypto-currencies will be plentiful.

There needs to be an attribute of bitcoin that mimics the same function as these authorities. Until then as long as it is easy to create a crypto-currency, I believe that bitcoin will be nothing more than an academic study. Nonetheless, I think that maybe crypto-currency systems will be adopted within companies as the company can force recognition of currency within itself and possibly governments/countries will adopt bitcoin-like currency systems, this I believe can have some real social benefits.

The technical design of bitcoin is worthy of a Nobel-prize, as I'm sure that there will be many benefits to humanity in the long run. However this isn't really about the quality of the code, imo the quality of the code and review process is proven by the use of an opensource model. It's more about properties that currently are not in the code, whether such properties can be coded, and the fact this problem is not being discussed.

Anyways I hope I'm wrong, I really do.

Please negate :)


http://bitcointalk.org/index.php?topic=3543.0

It probably depends on the perceived legitimacy.

If I were to fork my own currency, my biggest problem is that probably no one would care.  I couldn't spend it anywhere.

If I were the CEO of Google and did this, it might be a different story however.

I don't think so. Bitcoin has the first adopter advantage. Any new service requires many early adopters that will help it launch. All the people that are predisposed to be early adopters of an electronic currency like bitcoin are invested in bitcoin and will actively discourage a different e-coin. Without a pool of active early adopters a new e-coin is doomed. This can only change if a majority of early bitcoin adopters recognize a major flaw in bitcoin that is solved by a different e-coin. At this point this is not likely.

I want a currency the state cant seize .

Having bitcoin backed by "authoritah" means they can remove your rights by cancelling your license.

Having bitcoin backed by physical items such as gold means they can seize them.

Bitcoin cant be backed by anything because that anything can be removed.

There should be competing currencies because then you can make profit by trading between them and each would be reliant on people's faith in the the entity redeeming those currencies. Google doesnt have to control the currency it just has to redeem it imo.

This is itself hardly relevant, ie facebook eats myspace, i'm sure there are many other historical examples where this does not matter. This would be relevant if all currency systems in the universe were had the same underlying structure as bitcoin.

The bitcoin concept has value, commercially and socially, but currently the total value of the bitcoin economy is less than 6mil USD. Lets assume that this is a reasonable estimation of the cost it would take to nurture another crypto-currency. Then any major private entity would be able to replace bitcoin currently.

Further this new entity will also guarantee the recognition of their crypto-currency, by extension guaranteeing value. Sure current day authorities are corruptly undermining the value of citizens cash, but to some extent they guarantee the value. I think that for bitcoin to work that some linkage to an authority of sorts will need to manifest itself. Now the structure this may take could be anything; imagine away. I would bet a small fortune and say if bitcoin is still working in 200 years without any change from today, then it will definitely be guaranteed by some sort of authority.

But what is to make the 'state' recognize it? What I'm saying is that there needs to be a unbreakable link between crypto-currency and the state.


Agree, maybe they will be the hypothetical entity I talk of???? :D

Imagine the situation in one or two years, where more and more business are starting to accept bitcoins. Now another group starts a new chain, and then another one, so we have three e-currencies. The problem for the two new ones is that nobody is accepting them, the companies only accept bitcoins. It would be difficult for the new currencies to be accepted by the business because no one uses them, and no one uses them because no business use them. So people will continue to use the original bitcoins and not the other currencies.

Now, lets imagine the new e-currencies are started by a group of merchants that accept them as a way to promote the new currency. Only in this case its posible that the new currency gets some traction and competes with the original bitcoin. But if there are already a bunch of e-currencies I doubt people will start using one more.

I personally think that having three or four e-currencies competing is good and I hope that with time appears competition. Having only one currency is probably not the safest situation.

Having competing currencies is normal in human societies, its how humans have lived most of the time. But presently we have grown so used to live under a money monopoly that its hard to think how it would work. Its funny and sad at the same time.

they can't seize the system you have your wallet.dat file on?

How is this different from bitcoin's by current position? And by extension any future hypothetical crypto-currency? I.e if bitcoin works, then by induction this shows the possibility of a new crypto-currency working. To deny this is to say bitcoin alone will not work.

[edit]
Also ebay didn't have to compete against a other online market places. Bitcoin has to compete against modern day currency systems. Your saying that removing the central printing authority is better than having a authority/s that will recognize/guarantee the value of the currency in some lawful physical way.
[/edit]

You make an interesting point about the infinite supply of digital cash.  That is something to think about.

But I'd like you to tell us more about what you mean by "recognized as payment by authorities"...

Do you just mean that fiat currencies are backed by a government that will enforce contracts based on them?  If so, I think that is a somewhat weak assertion.  Courts in the US are generally recognized as worthless for settling contract disputes, and are only used as a last resort when large sums are at stake.  Private enforcement (ie the mob) and third-party transaction insurance (eg paypal) are arguably better models.

Do you just mean that governments accept fiat currencies as payment of taxes?  Are you arguing that high taxes are good for an economy?

Or do you mean to argue the absolute extreme case -- that any viable currency must enjoy absolute monopoly as a store of current value, and this monopoly must be maintained by force?  If so, then I suppose you aren't alone.  Many in the US judiciary are already under the delusion that this is the case with Federal Reserve Notes.  Just look at Kelo v. New London and the recent Liberty Dollar case, where judges and federal prosecutors are more than happy to seize and redistribute property under some notion that Federal Reserve Notes are the final and absolute nationwide unit of account for all that is good, and that any competing measure of value ranging from the value an old lady has in keeping her home to the inherent value of precious metals constitutes a terroristic threat to the sanctity of the Federal Reserve monetary monopoly.

Its funny that bitcoin at the moment is a market monopoly on p2p cryptocurrencies.

I can just see someone going to the authorities and complaining that bitcoin serves the needs of its users too well and is being anti competitive.....

Microsoft actually invested in apple when the company was struggling essentially so they could say "we are not a monopoly" to the feds . I could see facebook investing in myspace for that exact reason if the authorities start sniffing around. I can also see bitcoiners supporting a rival crypto fork for the reason that it is dangerous having only one .

Its not in the best interests of safety that there is only one block chain that exists. Do we need a backup block chain ?

Here would be an interesting restructuring of the poll:

Do you think Bitcoin should be 50 BTC forever?

• Yes, and I don't own a significant number of BTC
• Yes, and I own a significant amount of BTC
• No, and I don't own a significant number of BTC
• No, and I own a significant amount of BTC

The main reason I think a consensus could grow to either (a) overthrow the block chain and start over, or (b) continue with 50 BTC for at least much longer than block 210000, is because I feel there is a good chance that lots of newcomers will come and feel that the early adopters are looking to be unjustly enriched by "hoarding" the BTC generated when generating BTC was much easier.

That consensus will come not from us, but from a million newcomers who feel BTC is overpriced because we're hoarding it for a huge speculative profit.

One might ask, what's the point in leaving a fiat currency that unjustly enriches bankers, only to go to another that unjustly enriches its founders and early adopters, ponzi style, at the expense of those adopting the currency?  There is no such thing as "something for nothing"... the massive profits "earned" in speculating BTC come at the expense of those adopting it, just as those at the top of a pyramid scheme profit not out of thin air, but at the expense of those at the bottom.

Most of us here are those "early adopters"... of course we don't "want" the opportunity to be unjustly enriched to be taken from us.  However, what is to be feared is how this same poll would fare out when there's 100 newcomers to each one of us here today.  We've come to throw off Ben Bernanke as a leech, and when 80% of the BTC is in the hands of less than 2% of its users, a mass of newcomers is going to consider us leeches too.

At least with 50 BTC forever, one is penalized for "saving" / "hoarding" in Bitcoin's early stages.  This penalty will tend to zero as time goes on.  Don't fool yourself: "saving" BTC in its early stages is not preservation of wealth, but a means of confiscating it from future newcomers under the guise of "earning" a profit.  Our future newcomers will quickly figure this out.

Only less than 1% of the total future BTC economy participants are at the table... the fact that 25% of the BTC ever to be minted is already circulating is a huge potential landmine for public adoption!

Here is another idea I came up with that would help to resolve this disparity.  The goal would be to make it so that only 2.5% of the BTC is issued, rather than 25%.  The problem is, there is no way Satoshi could have adequately predicted that BTC would be adopted far slower than issued.  If Satoshi were around, I wonder if he would consider that a problem.

1. Do a 10-to-1 reverse split, so that every 1 BTC today instantly appears in the software as 0.10 "new" BTC, but new BTC is worth 10x as much.  No one loses anything, it is effectively a move to the decimal point, we are just moving the balance with it.

2. Continue giving 5 new BTC every block, but up through block 2,100,000.  (5 new BTC would be the same worth as 50 BTC today).  Continue the halving methodology, it's just that it will be 1/10 the reward, up through original block number * 10.

Voila, there will still be 21 million BTC issued, it will just take 10x as long to get there.  No one will have lost any value, it's just that the early adopters will wield only 1/10 of the power to profit at the newcomers' expense.  The net effect is that we're giving the world more time to adopt BTC without screwing every latecomer.

Outrageous?  Not as outrageous as fending off against a bunch of people who don't like that early adopters are profiting hugely at their huge expense and who are willing to do something about it, like start a new blockchain.  They're just not here yet.  When they come, we'll have no say in the matter.

So someone goes out and spends $2000 on their new mining rig with the view that it's an investment, then suddenly their rig has effectively only got 1/10th the power that he thought it would?

I don't think we need to cater to new-comers in that way at all, just like land owners of 200 years ago didn't cater to the fact that new-comers now probably have a hard time affording a tiny apartment... but there's still people willing to buy said apartments, even if the 'early adopters' of property have expansive wealth today.

Nope, it has 100% of the power he thought it would, and then some, since 5 BTC would be worth 10x what it was before the "reverse stock split".  What would be cut by tenths is the percentage of coins already mined.

In such a case, his investment would be worth more, because the mining bounty wouldn't be cut in half in 2013.  It would be some time much later.  The 10.5 million BTC that are easiest to mine would only be 5% gone, instead of 50% gone as they are now.

In fact, the end result would be to encourage mining.  It would help avoid a situation where people want BTC but can't get it except at highly inflated (and volatile) prices, high only because those holding most of the coins won't sell because they're waiting to get rich off them.  More people will have an alternative, they can start mining far into the future.

Imagine the same thing with a stock. Why would I ever invest if the rules are going to be changed, maybe even multiple times, as seen fit?

This currency was built upon the foundation of a certain controlled inflation rate. If you tamper with it, you tamper with other people’s investments which were made under this assumption. So essentially, this would be fraud/theft and lead to an enormous drop of trust in a currency in which trust is the only foundation.

Start your own block chain.

Exactly.  Stocks are built on layer upon layer of risk due to insider manipulation -- accounting fraud, executives, boards of directors, stock exchanges, monetary manipulation, government intervention, etc..

BitCoin has one layer of risk:  the network itself.

The only thing that connects the crypto-currency world with the real world is 'faith' by human agents:
                      (a) that someone else will value their bitcoins, fundamentally you have to ask why would another entity value your bitcoins?
                                   i.e With fiat I know that an authority will accept payment using them.
                      (b) That no other crypto-currency will come into existence and devalue their holdings.
                                  i.e It would be hard to start a fiat currency that had value unless connected to something physical, (i.e an entity or resource)

You could say that bitcoin is a religion! Just a really complex one. Modern day currencies have some element ( some would say minor due to 'corruption'/'manipulation') connection with the world that makes it legit. and the value is enforceable. Who will defend the value of bitcoins? I think that it's somewhat shortsighted that somehow 'market' forces can do this, with the current design.

I guess what I am really saying is that bitcoin, undercurrent design, can not exist without a state.

And the solution to this would be a state with distributed design like bitcoin. Bitcoin has been able to some extent remove power from who-ever controls the printing press and transaction processing. This is an amazing achievement by itself. It's this ability to distribute power somewhat randomly that is the true achievement of bitcoin so far, and it's these logical constructs that need to be applied further to design a state that will enforce the value of bitcoin. Now the word force I am using in a abstract sense. It may mean military, production services, I don't know, but it will need to be able to control the behavior of people and it's design will need to be such that people can put faith in it.

So yea it comes down to faith. Currently I believe there are more reasons to stay with the current fiat system then move to the world of potentially unlimited crypto-currencies.

Ofcourse we put faith in our current state systems,
                               
                     we put faith in them to follow the rules that are coded on paper,
                     we have faith that everyone in the community will abide by the rules that everyone has agreed to,
                     we have faith in each other that we will enforce these rules when they are broken,
                     that the rules are applied consistently(this is broken when creating a new crypto-currency, you are creating a new set of rules)
                     
                     we take something that is written on paper, that is abstract and we make it real.

The current fiat system has more elements in guaranteeing this abstractness than bitcoin does. Bitcoin has been able to make sure that some of the rules no longer need faith, but bitcoin needs something 'other' to guarantee it's existence.

imho

Bitcoin is not a monopoly by any means.

There are other currencies around. Even not countirng government imposed currencies (these are the true monopoly) there are other competing currencies around.

But even in the case you want to reduce the market to p2p anonymous currencies (and lets assume Bitcoin is the only one in this sub-market) its still not a monopoly, because any competitor can freely enter the market. Being the only producer is not a monopoly, being the only sactioned producer is a monopoly.


No, and big time no. Nobody here is unjustly enriching from others. Nobody is taking huge profits from anyone. We early adopters took a risk and also had vision to believe in this project, others didnt, and well see who was right and who deserve a reward.

If Bitcoin fails should I go and demand that the others compensate me for the benefits they got while I was dedicating time to Bitcoin? No, that would be unjust. I have dedicated a lot of time to study economics, specially monetary policy and history. All that kwoledge adquired by my own dedication, part of my personal and limited knowledge of the world, has led me to believe in this project. Also, I was there surfing the internet and kept myself informed. Then I spent time promoting Bitcoin and trying to collaborate with the community in this forum. Other people used their time in other things that, given their personal limited knowledge at that time, though it was better for them. If Bitcoin fails do I have the right to demand that they give part of their profits to me? Why am I being unjust, if Bitcoin finally takes off and my efforts are early adopter help to bring a better world with this new currency?

Everybody has limited and local information, and based on that we make our decissions and take our rewards and our lessons. Trying to play god, assume you have all the information and can judge the motivations and situations that led to this outcome is just for dictators.

PS: On more practical grounds, I highly doubt in the future a scenario like the one you describe happens. People just will start using bitcoins because it will be useful to them somehow. I am 100% sure that someone will try to fork the chain and create a inflationary version, but I am 100% sure as well he will fail. History proves that inflationary voluntary currencies just die. Only way you can keep inflating away a curency and having people accept it is using violence. Without government backing, a inflationary currency dies.

Rules change all the time in other investments (stock, houses, etc). While I agree that it would be like tampering with other people's investments, I don't think it would count as fraud unless the developers guaranteed somewhere not to tamper with it, and then did. But I've seen no such guarantees with Bitcoin, so I take that into account when making my decision to invest.

Uh sorry vladimir, who were you talking to? I don't advocate making any changes at all... bc rocks as it is!

You are defining what a currency is: an object that by mutual agreement everybody starts using as means of exchange. It is only later that governments come and create a monopoly.

How do you know you will go to the supermarket next week and there will be food? There is no government law that forbids all supermarkets from closing. How do you know it wont happen? Are you actively planning for such an eventuallity? Same with Bitcoin.

Its quite sad that you think that only through government can things work, when reality shows us that its the other way around.

This whole idea of "early adopters" is nonsense. I'm annoyed^* at the "early adopters" who managed to accumulate huge quantities of bitcoins while CPU mining was "easy". In 2015 there will be people annoyed at the "early adopters" who got into mining/selling via bitcoin way back in 2012. At the turn of the century kids will be cursing their grandparents for not becoming early adopters in the 2020s...

Footnotes:
* I'm only a little annoyed :-)

Concerning the "Ponzi" notion, Bitcoin only resembles a Ponzi scheme so long as it is primarily thought of as a vehicle for investment - i.e. so long as the only thing you can buy with Bitcoin is other currencies.  If Bitcoin becomes well-known for its convenience rather than of its appreciation, and becomes widely used in day-to-day transactions, any resemblance to a Ponzi scheme will vanish in a puff of smoke.  Early adopters may still profit, but not at the expense of later adopters.

Even if Bitcoin continued to be used primarily for investment, that doesn't imply unsustainability.  Nobody calls gold a Ponzi scheme.  The biggest difference between Bitcoin and gold, as I see it, is that the "total gold over time" chart is at a much further stage than the "total Bitcoin over time" chart - thus, it has gotten to a point where the deflation of gold can't be depended upon by those who invest in it.  Inevitably this lies ahead for Bitcoin too, and it's not like it would be a bad thing (http://bitcointalk.org/index.php?topic=4898.0).

They don't annoy anyone until they decide to cash in, and flood the market with their "savings", which causes "WTF" results for everybody else.

If only 5% of the BTC in existence are circulating, and the early adopters decide to cash in 5% of their "savings", what happens to the Bitcoin economy?  Exactly the same thing as if money printing was used to double the circulation overnight.  The price halves, and they have basically confiscated 50% of the entire Bitcoin economy.

If 95% of the BTC in existence are sleeping in the hands of someone waiting to "get rich", this can be done several times.  When done, they'll have confiscated, oh, about 95% of the Bitcoin economy.  That is exactly how they "get rich" - by confiscating the wealth of others.  Riches don't come out of thin air.

You really think someone has 95% of the bitcoins in existance? But lets assume it for the sake of the argument, what would he/she gain from crashing the value of bitcoins?

It is likely that current authorities will adopt attributes of bitcoin in one form or another given bitcoin removes the mint and current transaction processing system, they also have strong motives like preserving current wealth of powerful figures.

By governments you/I mean enforcing entity. And historically it has been the enforcing entity that existed first, then the currency. Today's currency systems, there is no need for a mutual agreement at the point of transaction, the exchange of fiat will be recognized by the state. The mutual agreement manifests itself when citizens vote and their faith in the state, that their politicians will make sure that the monetary authorities adhere the rules outlined and preserve the value of fiat, this I believe is the fundamental issue is the failure of adherence, of-course it has wider implications for other aspects of society.

Which currency system are you refering to? I am unaware of any currency system throughout history that has existed without a 'physical authority/backing'


Like you say let's imagine;

                    that no one will care about the fact 25% of bitcoins are already minted. this is a separate issue regarding minting implementation, not relevant here.
                    that current entities of power will just allow a simple transfer of power to bitcoin holders
                    that no one will start another crypto-currency, that is potentially recognized and backed by a physical entity
                    that current states will adjust their currency systems to incorporate features of bitcoin, thereby providing physical backing on top.


Yes, I mean physical enforcement. A system of control/belief that users will adhere to and implement, it really doesn't matter what form it takes as long as it has properties I've outlined prior.

Yes, something along these lines. Lets say only one bitcoin system could exist in the universe, then probability of bitcoin working would increase, although whoever has control of the most cpu power may control the system(this maybe a weak assertion as I'm not up with the inner workings of bitcoin). Gold for example has a small pre-determined supply, hence why it is used as backing.

No thats not what I'm arguing although I'm Aussie and I would say yes, based on outcomes achieved in Scandinavia, thats an entirely different discussion :).


I think also that if people are going to assume that bitcoin will work, then naturally you will be competing against other current currency systems. So the expectation is that bitcoin will replace a significant proportion of modern day currency. By extension there will be a massive shift in global power, and no one seems to think that is going to be issue; given that I believe that it will be relatively simple to start a new crypto-currency. This doesn't even take into account an enforcing entity.

They have more to lose allowing bitcoin on it’s current path, than allow it to be implemented alongside current monetary systems.


right.............. didn’t know they were privately owned.........


intended to spread power over more entities, i.e the state should not set monetary policy as there is to much power in one entity, ofcourse the groups that fill this void should in some way represent the interests of the community as a whole rather than the perceived current arrangement of representing a minority. This is a problem related to implementation, rather than the design of the system itself.


Thankyou for highlighting this, I should have been using the term monetary systems in my responses.


Why is this relevant, has does this apply to bitcoin/crypto-currencies? You imply that it is reasonable to assume that bitcoin will fail and that other crypto-currencies will exist, so which do you want, infinite crypto-currency or one sole crypto-currency?  If bitcoin was the sole crypto-currency it would be a finite resource with a set of very interesting and useful properties, most importantly, the control/power over the resource is distributed.

The are, in fact, private banks operating under a government charter.  So, by definition, they are privately owned.  The idea that they are owned by the public in any context is false.

No. Money always appears naturally and it is later that governments monpolize it. Study your history.


Most of them. During the middle ages there were numerous private mints for example.

Governements did not chose gold and silver as money, they just monopolized their use with regulations once they were widely used as money by the people.


So?

The whole point of bitcoin is that is not government backed. That is the reason most of us trust it. If you study history ALL governments have debased the currency. For some it has taken longer, for others shorter, but ALL have debased the currency. So if you trust the government currency you are up for a surprise. Because Bitcoin is not a government system I trust it. If the government issued a bitcoin similar system I would not trust it.

And if you have a currency not backed by the government but a centrallized organization backing it you have high probability of being regulated or even banned by the government to stop you from competing with their currency. Check the recent Liberty dollars case.

What you dont seem to like of bitcoin is the exact reason why I like it.

And please lets stop with this inernet meme that the Federal Reserve is a private bank. Its not.

And most of the central banks of the world are not private, like f.e. the European Central Bank. And even in the few cases where the central bank is private, it only gets the power because of the government charter.

Its quite irrelevant that the central bank is government owned or private, the problem is that a central bank exists.

Its not the same. The part that takes the decissions inside the Federal Reserve System are agencies of the federal government. Bernanke and the rest of the gang are nominated by the president and ratified by congress. How is that a private institution? How is a corporation any similar? Yes corporations get privileges from the government but they dont have a federal government agency as ruling institution...

The same is true for the Supreme Court and yet nobody says it's private.
I agree with hugo, it's misleading to say a central bank is a private institution. It is a state institution.

Wikipedia says:

It's real simple folks.  Bitcoin and fiat will continue to coexist.  Bitcoin will rise as fiat falls. Business and government will continue to accept fiat.   All we need is the technology to convert on the fly like you have with off-shore debit cards that convert and draw off foreign currency holdings, etc.      Think of it as adding "backward-compatibility with fiat" to bitcoin the leading cryptocurrency of the future.   

Fed. Res. has shareholders who are the big money center banks. It is more like a cartel of private banking interests that have a patina of govt. respectability given to them with these "oversight" BS.

Can you ever imagine a Fed. Res. chairman being appointed that was on the side of the people and not the banks owners ???

It's a private banking cartel, get over it.

Like hugolp said it is irrelevant(unless proven otherwise) to this discussion. It would be appreciated that a discussion on "What level of accountability and transparency is needed for a private institution to become public" or w/e be held in a different thread. I'm sure it would be an interesting thread.

Reviewing the discussion so far it seems that I’m trying to say this;

Premise: An object can only be an used as a currency, iff it has an ‘non-infinite’¹ supply².

Any fiat through-out history has followed these rules, and when it deviates from these rules it fails,i.e debasing.  

I think that it needs to be proven that either this premise is untrue, or crypto-currencies will have a ‘non-infinite’ supply.



I assume your talking about local currencies? They are always backed by something either goods and services, precious metal, or a monopolized currency. Monopolizing a non-backed currency is essential to preserve the ‘non-infinite’ supply property. When a private fiat is backed, this puts an indirect constraint on the supply of the fiat, if more fiat is created then can be backed then this violates the premise outlined above and the object no longer functions as a currency, aka debasing.


Mints used precious metal or notes were backed by goods and services, that is what constrains supply.


This issue regarding the implementation of the monetary system, i.e transparency/accountability. Unless you can prove that current monetary systems can never be transparent/accountable, then imo this represents an ideological view.


That's a good point. This puts additional constraints on the crypto-currency assuming there is a conspiracy by the powerful to prevent a transfer of wealth, that the backing organisation will also need to be distributed in some way..........


Hypothetical: Lets assume that it is not possible to debase fiat, lets assume that anyone can create a fiat. I would think that it is still possible to debase the currency system by creating successive fiats.

Total fiat in circulation = Summation of all base fiats -> which will approach infinity as there is no upper-bound on the number of base fiats. This is the world bit-coin lives in. There needs to either (be a proof that there is an upper-bound on the number of base fiats or rate of creation of base fiats) or bit-coin doesn’t live in this world or the premise is false.

1. Non-infinite does not have to mean finite imo, simply that there is some reasonable constraint on supply.

2.Object then needs to be considered useful, i.e size, weight; you can’t use water, but if weight and size wern’t an issue you could.

I know, that annoys me too.  The profits are private.  The losses are public.

But I think it is important to discuss, at least.  Because half of Americans are usually fairly horrified to learn that the government doesn't actually control the money supply.  And the other half are horrified to learn that private banks have been granted all of these governmental powers.

Man I laughed hard, I think Hugolp settled it.

I'd say they're a branch of the state. Normally the work "government" is reserved to the executive branch of the state. The central bank, as the supreme court, is independent from government, yet part of the state.

Don't they call it(supreme court) part of the Judicial Branch??? As in the 3 branches of government. Executive, legislative and Judicial?

I see your point though.

It's obvious that most of you aren't Americans.  We don't have a parliamentary system, so there is no "government" separate from the state.  In common parlance, "government" means everything from the courts to the fire department to the DMV.  Though, technically, the courts are supposed to be independent of the government.

And the US isn't actually a government or a state anyways, it's a trade federation.  So it's really more like the opposite of a government.  It's an accelerant.

It's all complicated by the fact that elected officials basically just do whatever the hell they want with no regard for anything.

If you had a high school civic teacher, s/he should be fired.

The United States is a Federated Republic, each state chooses it's own structure, but most are either a federated republic directly copied from the federal level, or commonwealth republics.

The US is a far cry from a trade federation.

I hate to pile on, but no (https://secure.wikimedia.org/wikipedia/en/wiki/Federal_government_of_the_United_States). The judiciary is the third branch of the US government, alongside the executive and legislative branches.

Actually.... the more I read discussions of this, the more I think I like permainflation. Not for bitcoin, of course, but in general for currency. The thing is, I have started to see bitcoin as more commodity than currency. Much like gold, its a good way to hold value, better than gold in that its far easier to transfer but....

It seems like you really want multiple vehicles for various purposes. Bitcoin, gold etc is great for holding value, even going up in value over time. It encourages hoarding, or "saving" to use a more positive term.

On the other hand, something that has a value that floats and encourages hoarding is less desireable for a store. When buying and selling goods etc, you really don't need or even particualarly need something like that. I think its more something whose value stays relatively constant with that of the goods that its used for.... it doesn't matter whether its inflation or deflation, you can't re-price an entire supermarket every few hours.

That said, bitcoin has some obvious gaps, 10 mins per block, etc. Seems to me that it would almost make sense for an inflationary currencty (not that I am sure what sort of formula it would want to use or would even make sense) to compliment bitcoin. Something that you know is going to inflate so rather than keep it, you get small amounts to use as needed.

Much like someone who keeps a hoard of gold still needs to trade small amounts of that gold for dollars to go shopping, but, doesn't use cash as a savings instrument (since its not very good at that).

Just my thoughts now, my thinking on this changes every day or two so take it with a grain of salt.

Newcomers could always just "undervalue" the early adopters' bitcoins, no?

Possible in theory if the newcomers are the large majority and dirt poor.

Okay I misspoke;  they (the Federal courts at least) are effectively independent as a separate branch.  I see no distinction but I suppose you are correct.

Regardless, I stand by my assertion that there is no evidence of the US having governed anything, ever, having been conceived and created totally without the means or motivation to do so.

After reading a lot of these posts, and the arguments supporting them, I am really beginning to think that a portion of these 'new members' are government plants to attempt to either confuse, and/or stop support for bitcoin threw subtle manipulation of other confused or hesitant peoples.

It really sounds to me like a lot of these arguments are truly designed to intentionally scare as many people away from anything, that is not government regulated, as possible.

I think all the power, and control, freak governments and bankers of the world have learned about bitcoin and simply figured .. 'eh .. it's only in it's early stages .. easy to destroy with just a little 'mis-information' .. send a few loyal (but stupid) volunteers to scare people away from it and be done with it.'

just my opinion in having looked at the overall actual content of a lot of these 'discussions'.

What's your opinion?

I am of the opinion that their opinion are genuine even though they are wrong.

That too many bitcoin supporters wear tin foil hats and understand a lot less about economics than they think they do.

Take it your a math and economics wiz from community college   :D

OH .. ya .. my tinfoil hats in the shop .. so I'm wearing my rubber spidy undies with the velcro strap today instead ..  :D

Its fun seeing control freaks rage. All I need to know where someone stands is their view on what would happen if I refuse to do something they think is a fantastic plan for humanity.

 :D

I have been watching several alternate bitcoin-based currencies start up, and so far the people behind them have all felt that even if there were fifty transactions per block every block paying 50 coins per block is stsill a very high transaction fee.

They have also all had problems with the idea of handing over goods to people who aren't willing to actually back the currency but instead just want to generate it and spend it. Miners, in other words.

Thus so far all are taking the approach of using private "friend to friend" networks for the first few years to develop and establish their currencies, as they feel this gives them the best ability to actually back the currency.

Basically if they are the only issuers of their currency then they can see to it that they only issue it in situations where they are in fact willing to back it with goods.

They do not want to be in the position of saying "we will give you goods in return for coins some stranger generates with a GPU". Instead they are aiming to be in the position of saying "we will give you good in return for coins that we issue".

In fact the reason each interest-group is creating its own currency is because they do not want to have to redeem other people's such currencies over which they have no control as to the amount issued and the value being provided by those who are issuing it.

-MarkM-

I've been thinking along similar lines.  Considering that I once worked for these bastards, I certainly wouldn't put it past them to hire trolls.  They are probably relatively cheap.  Hell, they might even be outsourcing to India.

I've been busy lately.

I find myself wanting to agree with the people who say it could, or is even likely to fail. I don't have that much in bitcoin right now, but I am young and have a normal income so, putting a small investment into a long shot risky bet is not something I am adverse to... so even saying its a risk and even a likely one, I am still comfortable using it and keeping some amount of quantity of it.... maybe even getting more...

That said, the idea that anything COULD fail is true. However, bitcoin only fails if we all stop using it. Even if there is a massive run, everyone runs on it, and the market crashes to .01 usd/btc... the majority of miners stop running it...total crash.

Even if/when that day comes, as long as one person, like yourself, keeps his miners running, the difficulty adjusts and, you keep getting these now worth less coins.... but... the whole thing can bootstrap from that all over again.

Of course, with decreasing generation, if nobody is passing transactions, it eventually means not even a worthless btc income, making trying to carry the system through a major crash a rather thankless job (unless you ended up with such a large hoard that it was worth reviving the system)

I guess all this is true of any currency but, the open and independent nature of bitcoin makes it seem like, it really does stand the best chance of still "being around", no matter what ends up happening to the value and current markets.

carp

you have to remember that Fiat currencies are always forced on you by men with guns and prison sentences.

People have never used them willingly, ever.

The Central banks that have always controlled every nation on earth have always made nation force the people to accept Fiat and at terminal cost.

Do you really believe that after 10 of thousands of years of humans using gold and silver (precious commodities) as currencies, or straight barter/trade, that they willingly changed to Fiat paper garbage money with no value at all ... no .. Asia, Europe, America, etc .. every single continent in history literally shot peoples families in front of them and stuck them in jail to force the public to use their currencies.

If the intelligent people of earth get a choice, they will always use alternative means for trade that can not be tracked by governments.  It's human nature to want your rights and freedoms.  The good ones will simply take them.

Choice in bitcoins in an option for the strong to start with, let the sheep follow later, when once again, they don't get a choice.

+1

me ago i think

Its a very much a possibility. http://www.fmsasg.com/News/Content/FMSInQTel.asp (http://www.fmsasg.com/News/Content/FMSInQTel.asp)

The red flags would have gone up a long time ago i think. :)

Also this http://en.wikipedia.org/wiki/COINTELPRO (http://en.wikipedia.org/wiki/COINTELPRO)

This thread looks very much like one of these operations imo.

Or you're just paranoid.

You are one of them.

this is becoming a joke........ I am not apart of some government conspiracy.

This simply to help, would you all rather have your "hopes" corrected now so that a collective solution can be found???? Or rather in the future when bitcoin is truly against the wilderness and all of your hopes and dreams for bitcoin will be decimated??????

If you don't understand ask for help, or read about the topics that are indirectly refered to.

I.E USE YOUR BRAIN

I am all for a healthy amount of "skeptical questioning", and I can agree with this statement:


imo thats "healthy".

This isn't




And this is borderline


And remember Galileo told everyone that the sun was at the center of the universe, look what happen to him. (Not in anyway comparing the scale of this to Galileo :D)

Just because you don't understand something, isn't reason to say it is false.




I come here bearing gifts, i.e seeing something that it seems no one else could.

Sorry, I can't.  But what happens if a very small nation recognizes bitcoin as an official tax currency?  I think that if Bitcoin has any successes at all, such a recognition is only a matter of time.  There are precedents for such a maneuver, such as the many small South American nations that peg their own national currencies to the US $ despite having no control over the value of the US $ whatever.  The first hurdle that Bitcoin must get over, is to reach some level of acceptable monetary inflation rate without getting crushed.  This will take till at least 2013 when the first block reward drop occurs.  That is a major weak moment.  If we survive that, then the next hurdle is achieving a fairly stable market price.  It won't take much longer than that before some tiny coastal nation that depends heavily on international trade (think taiwan) for their own local economies to support Bitcoin, even if that is only on an unofficial basis.  I can't even hazard a guess how long that would take under the best of situations.  But once one small nation was willing to openly support Bitcoin, then that means that the threats of bigger nations to suppress same were already doomed to failure, and Bitcoin will outlive us all.

There are some important weaknesses in my arguments that may be exploitable, will outline later. Busy atm


e.g You could argue that world of cryptocurrencies is so broadly defined that there exist within this world cryptocurrencies that exhibit the properities outlined prior. i.e could bitcoin be developed enough with properties that make it something beyond the current definition of crypto-currencies. This could become a rather subjective topic.

e.g Each bitcoin could be associated with a solution to a computationally challenging problem. e.g a subset of a fractal, this applies an indirect constraint on the amount of bitcoins to be minted. But possibly puts power in the hands of those with the most computing power.

e.g Maybe the collective nature of bitcoins qualifies as a unique property.

Been lurking so far, but I didn't follow this. First block reward drop in 2013? I don't get it. Can you explain what this is for me?

The reward to miners for solving a block will halve from 50 to 25.

Its designed so that eventually the reward will be zero and miners will instead collect transaction fees.

Yes, but if BTC early adopters end up making a lot of money...
This will create a huge incentive to be an early adopter of similar crypto-currencies.

If fact, people will try to parlay BTC early adoption...
Into repeated early adoption of anything promising.

Since all crypto-currencies will be exchangable by Market Makers...
People are not going to "defend" BTC...
They will hedge their bets by diversifying across multiple currencies.

"BTC loyalty" is a myth... the loyalty is to money.

The only way BitCoin early adopters make a lot of money is if the uncertainty over BitCoin's viability has caused it to be initially undervalued.  If the concept is proven, any similar system will not launch with that same uncertainty--either prices will start at a high level from the beginning if there is any good reason to believe the new system will succeed, or there will be enough competitors failing left and right to make "early adoption" a very risky proposition indeed.  Either way, there's no such thing as a money machine--no one is likely to make anything on a bitcoin competitor unless it has something fundamentally new to differentiate it.

These discussions about being the first, remind me of http://www.milliondollarhomepage.com  ...I mean, who ever made any real money selling pixel ads besides this guy? No-one as far as I know.

Ironically, doood, that was precisely the venture from history I was thinking of when I wrote that last paragraph.  Great minds and all that I guess ;)

There are two forms of doubt with BTC.

1)  Will the idea of BitCoin be able to suceced.
2)  Will the implementation of BitCoin be able to succeed.

These are two separate problems.  It may possibly be true that 1 is able to succeed, but 2 is not due to some unforeseen flaw.  And even if 2 is a success, a new competing currency would be still have the same risk as #2.

The new currency would also have early adopters generally find out about it before everyone else.  Information does not move instantly.  If 50 clones came out, would all 50 have the same high price?  I doubt it.  The early adopters of each one would be people who are on the inside or know the creators, and the public would be the last two know.

A clone/improvement will succeed if it is somehow better to use than BTC.  There are enough pain points with BTC now that might make it inferior to a future currency.

All the advantages of BTC being scarce dry up once you realize that although BTC's are scarce, if you include all possible bitcoin implementations, they are as scarce as stars in the galaxy.

Hehe. On the other hand, noone has tried selling pixel ads for BTC yet ;)

They totally did!  Saw it almost a month ago, and I haven't been able to find it again...

EDIT:  Did stumble upon this (http://greta.electricgoat.net/) though.  :P

Thanks! I found a green blob-looking thing there with yellow eyes and what looked like poo stains on his behind... fixed him up a lot and made a new radio-emitting avatar :)

I really should have taken a screen shot of what it looked like before!

That is an ingenious application of bitcoins--taking advantage of the fact that they have some value without needing to worry about their specific value.  I hope they're donating the proceeds back to the faucet!  That would be ideal.

TC's 2nd point agrees with the one I tried to make above...
Clones of BTC effectively change it's "hard cap" to more of a "soft cap".

And for the good folks that think BTC has a big "head start"...
Let's say Google or Apple or Geico or a small Carribean Island...
Or some sort of enviro or political organization...
Decided to launch a BTC clone with minor enhancements...
Promoting heavily to an employee/user/zombie base of 50,000 or whatever...
Could vault past BTC in market share within months.

Having competing crypto-currencies...
Would actually help legitimize BTC...
If you have exactly ONE... to an average person it's suspect.
 

An environment of multiple cryptocurrencies is a likely future but I don't think a BTC clone will come from Google, Apple, or any nation-State because those entities would be centralized in nature and they would not be in a position to exploit the attributes of bitcoin, such as remaining open and operational while under political attack.  It would almost be like Google coming out with their own BitTorrent server to compete against The Pirate Bay.

If there were multiple bitcoin style currencies that would be better. Sometimes the market demands more currency, and that is the natural setting of interest rates. In this type of environment, you can create "digital currency baskets" based on algorithms to have better strength and sell them as a financial product. That would allow for a more modern currency system that can fluctuate based on the market to meet population needs, innovation needs, and other issues that change the demand for currency.

Stable currency doesn't necessarily mean a fixed amount. It means an amount that is set by the marketplace. The best way to do that is just to legalize the use of any currency by anyone whenever they would like. We have the technology now to make all currencies introconvertible even at the retail counter.

Mishra: Necromancer Newbie
Finds old thread, brings it back from the dead
 :D

scrap every other coin traded on btc-e and you are golden.

I see no benefit to any other coins, they are all just other devs trying to get in on the action.

I don't see the "there could be infinite crypto-currencies" so that results in infinite coin supply and hurts Bitcoin.

There are a lot more materials which could be used as physical bullion than just gold & silver but gold & silver have "cornered" 99% of the market.

Barring a massive breech or flaw in the core protocol I doubt any alt will gain advantage over Bitcoin.

Lets look at the alts:
namecoin - has no intentional of being a currency.  infinite generation and coin destruction for registration of domains makes it unlikely it would be prefered OVER Bitcoin as a medium of exchange.

Various CPU coins - serve no purpose, liquidity, depth, and merchant adoption are non-existent.  When the sole purpose for your exisence is "I don't have no GPU lets mine CPU coins" you have no future.

SolidCoin - proprietary, restricted license.  Single person has complete control of system.  No real business will every accept that as payment. 

Taking another digital concept.  "Ebay is worthless.  There can be infinite number of auction sites".  Except ebay is VALUABLE specificially because even w/ infinite number of auction sites it is more useful than the alternatives.  Actually the more the pie is split among the alternatives the more valuable ebay becomes.

IMHO Bitcoin is the ebay of decentralized currencies.  It may have issues but it is "good enough" to survive and grow.   As time goes on I believe interest in alt-coins will wane.  Imagine 10 years from now if liquidity, value, and # of services is significantly higher and some "major" companies accept Bitcoin.  It becomes even harder to launch an alternative which is starting with nothing.

These statements are both completely wrong.

Bitcoin has most of the properties of a superior cash money that the market seeks out naturally but it is still deficient in some aspects, particularly fungibility. The market will decide what is the best money to use, fit for purpose, it always has done in the past.

Casascius already touched on this subject way earlier in the thread, but I'll reiterate what I think is the same idea:  It's not necessarily about benefit to the userbase, in the sense I think you mean.
Today, there was a lot of hoopla about Amazon supposedly adopting Bitcoin. Now, that's not likely to be true at all, but let's assume Amazon or some other big player really did think the idea was good. Would they just go and start accepting Bitcoin, as is? Maybe. It seems just as likely to me, however, that they would just create their own equivalent, maybe with some alterations. There's plenty of talk about what works and doesn't work currently already here, from the perspective of the current crowd of enthusiasts. A big retailer might well have ideas of their own about that. So, it's far from given that Bitcoin is what they'd go with, and any currency they might create would get huge exposure simply by virtue of being proposed by a big company. That doesn't necessarily mean Bitcoin would just die off, but it could set severe limits on the growth potential.

Personally, I think the big guys are still very interested in creating more centralized internet currencies, like Facebook credits etc, since that allows them more control. Personally, I think that's not going to fly, we've seen centralized internet currencies before and they haven't worked out very well, but that doesn't mean it won't be tried again. I think we're going to see more experimentation with centralized currencies before serious consideration is given to decentralized ones. If that does come to pass, then the question is what kind of features do big retailers want in a decentralized currency, and those may be very different from what Bitcoin offers. Anonymity isn't likely to be of interest to them, or for the mainstream userbase, either, for example.

IMO a big player taking interest in Bitcoin right now might not be such a good thing for Bitcoin. The whole system is still very small. The bigger the userbase gets, the better the chances of Bitcoin being the currency of choice for everyone are, but push it too early and you might just see a fork backed by one or more of the big players gain traction instead.

I'm also afraid that if Bitcoin fails, the whole concept of decentralized crypto-currency might fail, probably like forever.

Some say the cat is out of the bag, and you can't kill an idea, but I'm afraid it's not so easy.

The ecosystem and infrastructure around Bitcoin grew slowly, steadily and organically, making its value grow organically as well with people treating it as a scarce commodity. But if Bitcoin dies tomorrow, every man and their dog will announce a new currency/blockchain, so it's difficult to imagine that the community would agree on just one or a few again. With lots of parallel currencies, there'll be a hyper-inflation of what is at the end of the day merely hashed digital numbers. Without over-all limitation they will have no (or very low and extremely fluctuating) value, thus making the use as a money impossible.

About Amazon and Google, yes they will probably come up with their own credit systems one day, but they will most probably be based on central transaction databases. Doesn't make sense for Google to rip off a decentralized system like Bitcoin (although they did that with Diaspora  :-[).

Nah…decentralized crypto-currency, if not bitcoin, is the future.  There is not doubting that in my opinion.  Also, regarding the original poster that claims there is "no authority" that recognizes bitcoin, that's completely wrong.  The people using bitcoin are the authority.  In a sense, the people participating in bitcoin are a government…and one which many people will perceive to be more legitimate than legacy governmental authorities.

The Bitcoin network is around 10 Terahashs/s strong. Bitcoin is basically an internet of finance. It cannot die anymore than the WWW can die. I used the internet for years before browsers just fine. Nobody thought it was going to die. We just need a Mosaic type app to make Bitcoin blow up.

+1

i dont think its a good metric for success
If tomorrow  BTC drops to 1-3$/BTC the hash rate will drop quite fast
miners mine because the coin is valuable for trading, not the other way around
I don't think bitcoin will die but it might stagnate.

It dropped that far not long ago and hashrate did not drop a whole lot. If a country fails, their currency drops to zero. Bitcoin has no country to fail.

if silk road gets busted - BTC will drop significantly

and it dropped by ~50% and kept going down until the price started going up again
if it stayed at 2$ maybe it would have continued to decline...
these graphs look quite similar to me:
http://bitcoin.sipa.be/speed-lin-ever.png
http://bitcoincharts.com/charts/chart.png?width=940&m=mtgoxUSD&SubmitButton=Draw&r=&i=&c=0&s=&e=&Prev=&Next=&t=S&b=&a1=&m1=10&a2=&m2=25&x=0&i1=&i2=&i3=&i4=&v=0&cv=0&ps=0&l=0&p=0&

I think Bitcoin will follow growth similar to the internet itself:

https://encrypted-tbn3.google.com/images?q=tbn:ANd9GcSijclSqSOOol71GVYIrxLLGkLdjMXK7pUMJKJCW8oGdiOukKmVDg

it will grow similar to the internet only if the internet will provide services and products for BTC
this is kinda the main question - will BTC be adopted by sellers?
if yes - btc will grow. if no - it will stagnate(will be kept alive for illegal use only) or die.

There are uses in development that only Bitcoin can achieve, not fiat currency. Just watch and read the forum threads. Very exciting stuff.

can you link some examples?
Some of the uses that require Bitcoin don't require it to have any value.
Like email verification - it only requires the computational difficulty - it wont matter if the coin itself is worthless (it doesnt even require the blockkchain).

Bitcoin is a currency, of course it will have value, but yes there are uses that exploit the signature, time stamp, and open ledger aspects.
I personally like the idea of a bitcoin based email. A nano-payment for email is acceptable for legitimate use, but spammers would end up paying more than they want. There are smart contract ideas, international payments, publishing micro-payments, notarization, and many more I'm sure. Also Bitcoin allows vaultless security, extreme liquidity, no counterfeiting, security from inflation for savings, and much more.

even though there is no inflation - i wouldnt put my savings in bitcoin :)
I didn't mean that it has\will no value , but that it just doesn't require it, that some of the core features are enough to make some of the uses work.
I really think bitcoin can be a great currency for gaming - in-game micro-transactions, buying games, paying for subscriptions. these things are not a physical product, they are international, and can be easily traded online . like: i will sell you 10 hats on TF2 for 10BTC and then buy 1 month EVE subscription from somebody else who got it in-game for ISK. Others can buy 10BTC for $ and then spend it on EVE ISK or facebook credits or whatever. this way they wont have dozens of 10 cent charges on their paypal/credit card and will be able to trade between different game's currency quite easily online.

The micro-payment market alone can make Bitcoin blow up. All those online games with farm animals, magic swords, and laser beams will benefit from Bitcoin's low fees and universality. Larger payment items will follow.

Speculation is causing Bitcoin price to fluctuate just like fuel prices. I tend to fill up more often when it's low. The same can be done with Bitcoin and savings.

If miners leave , difficulty goes down...miners make more btc.....

nope
the amount of mined BTC is constant
so if BTC=6$ miners get 50K*6$ = 300K$/week
if BTC drops to 3$ - they get 150K$/week
the result will be less miners: (making up numbers now)
btc=6$ -> 1K miners get 300$/week
btc=3$ -> 500 miners get 300$/week (assuming getting 150$/week is unprofitable for a miner)
so the amount of hash power and miners is proportional to the price (or in more simple terms: hashpower costs $ not BTC)
the reason it won't really be proportional is speculation. but if the speculation is that its going down its probably going to have a snowball effect

Individual miners, that stick it out, still make more simply because there is less competition.  That was his point.  The near term value of the BTC generated is likely not to change much, but miners are also speculators themselves.

yeah but the hash rate will still go down
if you trace a few posts back the point was that having a high hash rate now is not a good metric for predicting the future of bitcoin since it depends on the value of bitcoin (including speculations that can go both ways).

bitcoin will NOT fail
bitcoin cannot fail
I want to be rich

of course it won't
everything is going to be OK
the blockchain will prevail
evil shall be banished into the realm of altcoins

STILL HERE

1/27/2012

LETS KEEP THIS THREAD GOING GUYS!

Someday this thread and the 10,000 BTC Pizza will be in the international museum of crypto-currency. :)

smellyBobby,

It's a very important, obvious, and valid point you raise.  And it won't go away by any means - it's just too easy to design a superior crypto-currency alternative that does everything Bitcoin does, only much better in one or more aspects.  For example, faster confirmed transactions:

Bitcoin is currently poorly implemented as a means by which a quick transaction (100% confirmed in under 15 seconds) can take place at a place of business between buyer and seller.  Making a purchase with paper currency can be authenticated in a matter of seconds (you give me $20 for a $13.49 purchase, here's $6.51 in change, your receipt, and we're done), and it takes about 5 seconds max to authenticate a credit card transaction.  With bitcoin, nothing's 100% confirmed until the 5-20 minutes it takes to solve a block.  That's not very reassuring to retailers. :) A node/server based system where the blockchain isn't reconciled on every client is absolutely necessary to save time and hard drive space.  As bitcoin becomes more popular, its flaws will limit its success and make way for an infinite number of possible alternatives which do its job better, faster, more safely, and with a greater degree of versatility.  There is no counter-argument to this point.  Bitcoins will hold antique value and nothing more in the long term.  It's the single most obvious reason why investing long-term in cryptocurrency that's not backed by the full faith of the treasury of a powerful nation is foolhardy.

I agree 100% with everything you say.  Think about the 'best case' scenario where 25% of all transactions were through bitcoin.  Imagine every client with a 1,000 TB blockchain.  Just.. stupid.

Bitcoin is an incredible proof of concept and its developers have my highest respect, but it's a proof of concept.

Also (edit) just to clarify, Bitcoin is BY FAR the best crypto currency out there right now.  Everything else is silly garbage or a disrespectful hack job of the original source.

You are holding Bitcoin to a higher standard.

Cash.  5 seconds = possible counterfeit and you lose 100% value + value of any change.
Credit card. 5 seconds = possible stolen card and you lose 100% value + $30 fee.
Bitcoin. 5 seconds (verify transaction exists w/ multiple peers) =possible but highly improbable chance of double spend and you have a 50% chance of losing value.

Neither cash nor credit card are 100%.  I would wager your odds of being defrauded with stolen credit card (or "friendly fraud" by reverse easy system) or counterfeit bill (possibly second hand) is much higher than the odds of being double spent for most transactions.


Your right it is stupid which is why the blockchain would be on servers and clients would be lightweight and connect to them as needed.

Long winded way to say money is evil. The false sense of scarcity has allowed power over others for a long time. It's not clear how much longer their power to manipulate minds and hold back tech. advances lasts. But things are unraveling in a good way now and if the unraveling follows other trends it may happen quickly.

See that other thread, Mastercard is forcing their customers to stop using BTC.  If Mastercard thought BTC was going to fail they wouldn't care about BTC.

INACCURATE
There is a mention of fraud concerns by "Mastercard and other banking affiliates" in the press release of why Paxum isn't dealing with BTC companies anymore.  Try not to be so alarmist and misleading.

Weren't Bitcoins worth like $0.50 in March of 2011?  Bet he's sorry he didn't buy a bunch up at that time...

I hope he didn't jump off a bridge. ...  Check the price chart from March to July 2011. :)

In Bitcoin the phrase "..of the people by the people and for the people." has meaning. Miners and those using Bitcoin are the authority. The world is full of corrupted currencies and history is replete with cases of governmental market manipulation and money corruption, decentralization is the cure.

History has also been a long road of citizens seeding power and influence to those who really crave it. Government, law, and the very character of this and other nations have been bent and broken piecemeal by those with the money to afford a voice. 

Money is said to be the life blood of a society however would any of you allow the beating of your heart to be controlled by any democracy you know let alone an elite group of charlatans like those involved in the recent housing shenanigans, or governments that are clearly controlled by interests other than those of the general voter?

Everything is hard until it's easy, but Bitcoin was a long time in coming. I worked half a life time and saved like a mother fucker to have almost all of it taken by the faceless fucks who really control us, whether it's Bitcoin, Phatcoin, or the fucking Qubit I'm out of the Monopoly money game for good.

How can we sink so low as to imagine we dont have the right to determine value?

+1

LOL I concur! ;D

By all means, why don't you make such a thing then? If it's so easy, how come Bitcoin is the first in existence? And how come no alternate crypto-currency to this date has solves any of the issues you mention?

The 10 minute block time is a trade-off between, as you mention, confirming transactions as quickly as possible, and - on the other hand - making sure announcements of new blocks don't happen too quickly in the network, which in the worst case would cause a congestion in the network, and at least be a disadvantage to the miners farther away from the person who finds the block, leading to territorial mining monopolies.

I'm not sure you fully understand why time in a P2P, distributed currency is needed. Since we're using proof-of-work, we need time. Working takes time. If we can do something in a short time, so can an attacker, time is the key to the security in the Bitcoin network.

Unless someone designs a crypto-currency that doesn't use proof-of-work, we will never get instantly confirming transactions. The double-spend problem remained unsolved for a long time for a very good reason. It would be awesome if this were possible though. This would be vastly superior to Bitcoin. But so far, no true P2P currency exists that doesn't use proof-of-work.

Simple. You have 0, yes 0 clue about what money is, where it came from, how it came about, what was it's initial function or utility and especially what is a good money. ZERO clue.

Come back to me after you learned all that and then we can talk.

Hint: You might as well start here -> http://www.youtube.com/watch?v=vowbrq_g5NM

Why are we posting rebuttals to posts made almost a year ago?

I for one will necro the fuck out of this thread. It's important for the history of Bitcoin.

I really didn't see the date before I wrote my post  :-[

okayguy.jpg

(we're not allowed to post the actual meme images, right?)

youmustbenewhere.png

I'm not looking up whatever image relates to that.  I've already learned that lesson.

I'm not here to offend anyone but nearly 90% of bitcoin services seem extremely unprofessional and the look like something a 12 year old made.

Also all i see in bitcoins bunch of people creating financial instruments for a currency that is nearly only used for speculation and trading. A currency's main goal is that it's a method to exchange for goods and services and bitcoin is missing this.

There are no professional marketplaces in the bitcoin world. The closest to what I have seen to a marketplace in the bitcoin world is bitmit and that looks like an eBay rip off. Forum are not marketplaces.
Half of this forum is filled with people wanting to make a quick buck only because they can't afford to play the game on Wall Street.

I'm currently in the process of building the world's first bitcoin marketplace. There are no real bitcoin marketplaces. Bitmit is horrible, forums are not marketplaces.

In this marketplace the sellers are going to have identities, reputations, we will verify their identities too for a fee.
The can also accept PayPal and Dwolla. The site is not here to promote bitcoins, its to promote exchange of goods and services. The mainstream use of bitcoins will be a by product.
exhcnage services are going to be BUILT INTO THE MARKETPLACE.
I find it ridiculous that we have to go to an exchange, convert and then return to another site to buy items.
Listing items will be free, selling will be free. eBay's business model is outdated.
Right now the Bitcoin features are in development. But it is coming. However you can sell items and specifically ask to get paid in btc.

I'm not saying this will save bitcoin. But a powerful marketplace is the reason why PayPal became what it is today.

acceptbtc, keep in mind how very YOUNG Bitcoin is.  I am glad to hear you are working to improve the Bitcoin world/experience with better services.  If you think the services that are available today are unprofessional-looking, you should have seen what was available last summer!  Vast improvements have been made, and vast improvements will continue to be made as long as people continue to come along and believe they can do better than the last guy.

Best of luck with your project - I hope you achieve what you are wanting to achieve with it, because it does sound like a good service!

acceptbtc,

Those are all good points and I am ecstatic that people are moving in that direction.

Personally, from my own thoughts, I would imagine a Bitcoin marketplace to evolve more in the direction of SilkRoad than eBay.  In fact, what I've been thinking about lately is more like a simple text-based P2P marketplace that could have several different front-ends, sort of an extension of #bitcoin-otc.  But you're right, a true alternative needs more than just Bitcoin support.  It needs to be able to attract both buyers and sellers of all types.  I am glad that Bitmit exists, but it doesn't seem to get much traffic, and probably won't get very far as simply an eBay clone.

One area I think is sorely lacking, just in general, is competition with Craigslist.  A useful, affordable local classified service is absolutely essential in this economy.  I'm convinced that Craigslist no longer fits that description.  Even though it is free, the amount of hassle, censorship and petty conflict that a real seller has to put up with on that site makes it completely impossible to use.  So, that's one feature not to consider:  community policing.

But please also consider the features that make eBay useful:  integrated messaging, integrated payment, location-awareness, dispute resolution.  In the current economy and resultant political environment, telephone and e-mail can be interceded.  Payment services are routinely cut off.  Shipping valuable goods long distances can be risky.  And obviously scammers are ever-present.

It may sound paranoid, but supporting Bitcoin means you can take all of those points and underline them.  It's not as easy as it seems.

That applies to just about any internet website made before 2000 AD.

And half since.

But they look a lot better than the websites before 1991. Form follows function. There is nothing wrong with a simple design if your message is simple. It's like the early days of desktop video editing (http://www.youtube.com/watch?v=aDlnqV3npNY); you could throw in every lap dissolve and SFX, but they tend to take away from the message. I like website designs like Drudge and Craigslist (even SR) for their simplicity.

A big turning point is coming when the block reward is cut by half

If the price of BTC can not double after that, most of the miners will be forced out, and the difficulty will drop a lot, and less people will be interested in BTC

If the price doubled after that, it will show strength of the BTC, then maybe more and more people will notice it

As I understand, the limited supply (not supply speed) is the biggest obstacle for BTC to become a transaction medium, but if the price can be kept high, then it will become a digital collection item

smellyBobby's failure is likely.

Listen, guys. It's time to stop predicting and speculating, and start using Bitcoin. You're all sitting on bitcoins right now, pretending you're going to strike it rich, but the community is dying in the meantime. Start thinking about the things you need in your life and start looking for and requesting them to be offered in the bitcoin community. Stop speculating on what the price might be 10 years from now and start actually building our economy.

A bunch of hoarders doesn't help a currency get adopted. Lots of spending does though. I'll be outlining this in one of my newer projects, BeyondBanks. I'll explain more about why this is important soon for those who are interested, and for those who already know, help spread the word.

what krugman said  :P

The main obstacle to buying things you want in bitcoins (if someone is selling) is transferring your wealth into btc. Once people are "sitting on" enough bitcoins they will start using them to buy stuff more often.

Don't throw the baby out with the bathwater. The community is very much alive and well. There is much development yet to be done, but the plan is in the works. I completely disagree that spending Bitcoin is very important unless you want to acquire them through marketing something or sell something without chargeback risk.

Soon there will be financial instruments based in Bitcoin and other services that will open up new types of markets and industries. Besides, Bitcoin was born from the spirit of revolution. You can't quit a revolution, you can only sell out. Krugman, as most pundits, is a sellout.

I'm sitting on bitcoins. Lots of bitcoins. Maybe more bitcoins than most.

I would use these bitcoins for purchases... oh what purchases I would make with these bitcoins of mine...

VERILY I SAY! OH THE SHEER VOLUME OF TRANSACTIONS I WOULD MAKE...

... if the currency were more mature.


I try though, I really do. When I sell things on craigslist I tip my hat to bitcoins, and some people actually email me and inquire about them. I've yet to actually buy or sell anything with bitcoins through that medium though.

Honestly the only thing I've ever bought with  bitcoins is the yubi key for my Mt. Gox account, and I don't think that counts.

I mean, I'd love to buy things off Newegg with bitcoins... that would be super sweet, and I've emailed them about it. But to be fair to them and other large businesses, there is just too much risk, and bitcoins are still volatile. People are going to sit on their coin's till it gets sticky. Thats going to take another 4-8 years. Its not so terribly long if you think about it.

Until then Bitcoins will slowly gain momentum as infrastructure is built and software and features mature until like the breaking of a great wave it hits the mainstream as if from nowhere and people will wish -like I wished- they had heard about bitcoin sooner.

https://en.bitcoin.it/wiki/Trade#Gift.2FDebit_Cards

There are newegg giftcards and cards for many other stores available.  Bitcoin will have to grow before the accept it directly, but eventually they will want to know how somebody is selling so many damn giftcards.

freaking sweeeeeet

I didn't specify this, and re-reading my post I guess I should:

I hate my Debit card.

I hate every bank I've ever carried a debit card with, including credit cards.

This isn't necessarily because I hate the banking system, the banks I have accounts with, or any particular branch... no. I hate my debit card because every other month it seems my info gets compromised as some retard loses a laptop at the BOA headquarters and they re-issue 600,000 cards and my Verizon payment is late because it tries to auto pay from a bunk card.

"oh poor you" you say to yourself "L2Billpay"... mock me not! you do not know the full breadth of my suffering.

For you see, I don't carry cash with me. its not convenient, and really, where has that shit been? Also, to get to a cash machine, I have to walk a mile or more out of my way while I'm at work. Its just the nature of things. I sweat enough as it is to earn my living, and after the first half of the day after I've crawled through an endless metallic labyrinth and I'm covered in horrible red-chalky-wtf-is-this-shit-if-not-paint, and all I want is so precious little. Just a soda. lucky for me the vending machines take debit, in what fashion the Japanese would call "charming for such a damaged people", I swipe my card and the the gears inside the machine grind together as the mechanism strains to sap every possible bit of energy from the solar panel in a sky that has not seen the sun in weeks as I sit there waiting ever so patiently for my sweet, sweet beverage.

:DENIED:

The machine laughs at me and I consider claiming my prize im trying to pay for with my angry little fists.

See, whatever network those machines use to process payment is routed through to their headquarters. All the way accross the states. Guess what this does guys! Hey! It triggers anti-theft from visa, because they think the purchase is happening in freaking Philadelphia

So I can't quench my thirst. I can't buy gas. I can't do anything but whine like an impotent jerk.

Eventually I get a call from them asking me to verify my purchases, and once I do, its gravy. until I get a new card.

But really, how often does that happen? Oh yeah, all the time.

I've ranted on a bit, but I guess I'll add this too. I had to work in Japan for over a month, and in that time not once not-one-freaking-time, did I ever have trouble with my debit card. I did not tell them I would be making purchases in japan beforehand. Perhaps whatever metrics they're using to determine theft are completely arbitrary.

"Oh no!!" "Unexplained purchase of a candy bar in Philly!!!" shut. down. everything.
"renting a mt. bike, buying groceries and hotel room in Japan? its cool."


tl;dr - I'm a lazy unorganized hypochondriac

Good point! And how much is Enough?

IMO, there are 2 different measure:

1. I have constant BTC inflow which covers more than my monthly spending (500 BTC per month at today's price )
2. I have enough BTC that will ensure my living cost of about 3 years (15,000 BTC in today's price)

If none of these conditions met, I tend to keep accumulating BTC

Isn't this true for most of the people? And due to the limited supply of total coins, these conditions will never be met by most of the people, so most of the people will keep accumulating  BTC  ;D

If your bitcoins are way more precious than your dollars you should obviously keep buying coins until they aren't.